Endesa SA
Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
---|---|---|---|
€72.00 | Mgfz | Hfvscpx |
Endesa Earnings: Working Capital Finally Improved and 2023 Guidance Maintained; Shares Undervalued
We retain our EUR 22.30 fair value estimate after no-moat Endesa reported good first-half results and conservatively confirmed its 2023 guidance. Shares have been sold off after left-wing parties did better than expected at the Spanish general elections in July 2023, implying the possibility that they could keep control of the parliament. Still, our long-term estimates are based on conservative power price assumptions of EUR 60 per megawatt-hour, meaning that an extension of the EUR 67/MWh clawback on hydro and power producers would have no impact. Shares are undervalued.